The Ultimate History-Of-Markets Chartbook

Whether gold-bug, permabull, or deflationst; BofAML provides a little something for everyone in the most complete picture guide to 'financial markets since 1800'. A collection of almost 100 charts on asset price returns, correlations, volatility, valuations and many other market and macro factors for the US, UK, Europe, Japan, and Emerging Markets.

“History does not repeat itself but it does rhyme.”-Mark Twain

The Long-run in numbers:

1.45%: the yield of US 10 year Treasuries on June 1, 2012; a 220-year low

1958: the last time US AAA corporate bond yields were as low as they are today

1517: Dutch government bond yields currently at lowest level in almost 500 years

320bps: the current spread between European dividend yields and German bund yields, an all-time high

63x: the amount EM equities are up since the late 1960s

$1900/oz: record high gold price reached in September 2011

43%: the drop in US real home prices since the 2006 peak, making the current US real estate bear market the greatest since 1921

8%: Japan’s share of global equity market cap; close to an all-time low and down from 44% in 1988

$3,642,000: What $1 invested in US large company stocks in 1824 would be worth today with dividends reinvested

1 out of 2: the number of years since 1871 that the S&P 500 has had a negative real price return

44%: the share of US Treasuries owned by foreigners; up from just 1% in 1945

280mn: the number of people India’s working age population will grow by over the next 25 years; this is more than the current working age population in the US and Germany combined

The Long-run in years:

1602: the Dutch East India Company becomes the first company to issue stocks and bondson the Amsterdam Stock Exchange

1685: Germany establishes the second stock exchange in the world

1790: an $80 million U.S. Government bond offering to refinance Revolutionary War debtbecomes the first publicly traded security in the US

1792: the NYSE is organized and the Bank of New York becomes the first company listed

1810: Russia is the first “emerging market” country to establish a stock market

1879: US stocks record their best year ever, returning 57%

1891: the first US equity bear market (>20% loss) is caused by the “Baring Brothers Crisis”

1918: US Inflation hits an all-time high of 20.4%

1931: US stocks record their worst year ever, declining 43%

1932: the most volatile year ever for US stocks as volatility hits 68%

1981: monthly US 10 year Treasury yields hit an all-time high of 15.8%

1982: the best year of total return for long-term Treasuries of 40%

1987: on “Black Monday,” October 19th, the Dow falls 23%, the largest daily drop ever

2009: the worst year for long-term Treasury returns with losses of 15%

2012: a year marked by multi-century lows in many DM government bond yields (includingthe Netherlands, France, US)

Central banks are the catalyst for the ultimate shorts. Such was the case in 1929 following a huge rally off of Benjamin Strong's activist central bank. The US was slowing fast and Stong's NY Fed bought time but also massively ELEVATED prices. As the world descended into what started as a recession, the Fed sealed the deal by putting a huge distance between the floor and the ceiling. October 1929, the whole thing came crumbling down.

Don't say I didn't warn you when buyers show up in mass after the ECB plays the role of the pied piper.

Let's talk about the fact that BofA/Merril is doing a long-term ultra-macro analysis to begin with. Does anyone remember ever seeing such broad-term macro analysis from BofA before?

This research goes back to 1880! Hardly your normal report from BofA! What does this tell you?

It says to me that BofA is increasingly aware that long-term macro forces are at play, that a generational event approaches and that they are looking deep into the historical charts for insight on the severity, duration and performance of said event.

Don't look at what the charts themselves tell you. That, you probably already know. Instead, read between the lines: Look at who is making the charts and ask 'why'?

I saw he source of the report and had to laugh. Merrill Lynch - destroyed by Obama's brother Stan O'Neil and Bank of America. Who would invest with a company owned by corrupt and bankrupt Bank of America? What scum.

Not all Twentyfourers are millionaires by now. Some had trusted such beacons of integrity like PanAm and Enron, Hartford and National Steel, Worldcom and General Motors, to name just a recent handful.

While compounded management boni went into orbit, the common shareholder better is quickly put onto the red list of endangered species. Many holders are left holding the empty bag and just won't be able to recover from the ongoing Fed-sponsored slaughterfest.

My Grandmother (God bless her soul) gave me a 10 share certificate of AT&T, probably from the early 1960's. Do you think AT&T shareholder department would even acknowledge that share existed on their books? HELL NO!!!! They did not want to give shit for it. Much less for the stock splits and back dividends and multiple ownerships since then!!

"That the number of countries involved in overborrowing is growing larger is a fact that owes itself primarily to economic policies pursued by these same governments. Yet the tolerance the international financial community has demonstrated toward this development should not be underestimated. This unpardonable laxity is shared not only by the international banks that continue to lend to them, but also by the International Monetary Fund, whose annual reports about these economies are extremely indulgent and optimistic.

Greece is a good case in point. An IMF mission visited here in early June and gave a mixed report: On the one hand, it admitted that policies followed by Prime Minister Andreas Papandreou's government from 1981-85 had been a catastrophe for the country; on the other hand, the IMF accepted the targets the government had set itself for 1986-87 - as though these targets had already been realized. The IMF took this position despite all the signs showing that these targets are not attainable and that the stabilization of the Greek economy is non-realizable, at least under the present conditions..."(from Constantin Collmer, in the Wall Street Journal, Sept. 2, 1986)

This article neglected to mention the all time high of gold in 1869 of $162.50. When adjusted for inflation, that is about $2628.

That amount, adjusted for inflation, is also higher than the "bubble" that people often speak of in regards to gold in 1980.

$1 invested in large company stock would quite possibly be zero, for how many DJIA businesses can be traced back to 1824? Not even the railroad industry existed then, and GE did not come along until about 1896.

And IF you did amass that $3,642,000, from 1824, you would be either over 188 years old, or long dead.

Also, that $1 of then had the buying power of roughly $20 today. No wonder there were half cent coins in circulation then.

Assuming their ridiculous scenario, $1 invested over a very aggressive period of 40 years would return $24. Keep in mind that "normal" person doesn't start his professional life a millionaire, but steadily accumulate savings (sometimes starting from a negative position), the multiplier effect is at best half that (12X the average saving).

If you assume a very conservative inflation rate of 2.5 per annum, the 24X becomes 3.5X, adding the saving life cycle, you would be very lucky to double your average savings in real terms over a period of 40 years.

Ignoring transaction costs, non-existing index over that period to invest in and idiosyncratic risks,

The real take-away is that stocks have averaged 1.5% above inflation since 1913, so you could double your real wealth in a lifetime, but if you bought at the wrong time, you might have been better off just holding gold. Note, I didn't say Treasuries or cash under the mattress.

if invested in the right companies two hundred freaking years ago with dividend reinvestment what a crock! Zero a million times over if invested in the wrong companies. I could have won $40M on the lottery too if I had a damn time machine. Stock brokers and time share salesmen.

Plutocrats in power - they screw - plutocrats out of power due to popular revolt - the populus gets comfy and distracted with smoke and mirrors - they start to destroy the public thing and everything that acts as a balance between privates - Plutocrats in power again

I was oblivious, helping to rattle sabres with Libya over a Line of Death or some such nonsense. My biggest concern back then was Liberty, but Liberty just meant getting to shore for a few hours.

Twenty-five years and many 'careers' later, not much has changed for me in that regard. Liberty still means trying to get to a shore, but instead of saluting the quarterdeck and heading off to get hammered, I surf the web, looking for any beachhead still defended by Truth.

I think of Zero Hedge as one of those beaches, and of most of you clowns as shipmates.

ZeroHedge is actually a friend of the DHS. Now, the ZeroHedge folks who are also NRA members are soul mates of our founding father Thomas Jefferson could be a problem for the politically correct elite running this country. The real question will be our voluntary army who were largely born by the poor folks of this country. Will they fire on their Mothers?

DHS can cause individuals and groups trouble, but their foundation is set in the shifting sands of lies and manipulations and truth will win. I hope the change will be a bloodless one for my children!

When a respected jounal labels Tyler as the Second most Financially dangerous man in America then you can be certain that he is being watched and scrutinized for the subversive seditious materials which are distributed here on the site.

Of course the Truth is always dangerous to the criminals in power. They will label it as they do in order to dissuade people from OPDENING THEIR EYES. They want the public myopic and bitemporally hemianopic. Blind people are so much easier to manage.

If they let the fookin' gold price rise to astronomical levels, instead of destroying currency purchasing power by attempting to control bullion investment, gold markets would support liquidity. That's the fookin' irony.

$3,642,000: What $1 invested in US large company stocks in 1824 would be worth today with dividends reinvested

The fund managers here will jump all over this. But so will I with the contention that this is meaningless in the context of a 50 year individual investment lifespan when one needs much the principal at multiple points in time. Maybe this is relevant if your great, great, great, great grandfather could afford to ignore the extra loot and resist the impulse to sell when the crash after each bubble is well under way, and so could your great, great, great grandfather; and your great, great grandfather; and your great grandfather; and your grandfather; your father; and you.

very kind, thank you.
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A Fourth of July Speech by Mark Twain
Gutenburg.org ^ | 4 July 1872 | Mark Twainhttp://www.freerepublic.com/focus/f-news/1660212/posts
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"..This is an age of progress, and ours is a progressive land. A great and glorious land, too--a land which has developed a Washington, a Franklin, a Wm. M. Tweed, a Longfellow, a Motley, a Jay Gould, a Samuel C. Pomeroy, a recent Congress which has never had its equal (in some respects), and a United States Army which conquered sixty Indians in eight months by tiring them out which is much better than uncivilized slaughter, God knows. We have a criminal jury system which is superior to any in the world; and its efficiency is only marred by the difficulty of finding twelve men every day who don't know anything and can't read. And I may observe that we have an insanity plea that would have saved Cain. I think I can say, and say with pride, that we have some legislatures that bring higher prices than any in the world.

I refer with effusion to our railway system, which consents to let us live, though it might do the opposite, being our owners. It only destroyed three thousand and seventy lives last year by collisions, and twenty-seven thousand two hundred and sixty by running over heedless and unnecessary people at crossings. The companies seriously regretted the killing of these thirty thousand people, and went so far as to pay for some of them--voluntarily, of course, for the meanest of us would not claim that we possess a court treacherous enough to enforce a law against a railway company. But, thank Heaven, the railway companies are generally disposed to do the right and kindly thing without--compulsion. I know of an instance which greatly touched me at the time. After an accident the company sent home the remains of a dear distant old relative of mine in a basket, with the remark, "Please state what figure you hold him at--and return the basket." Now there couldn't be anything friendlier than that.

But I must not stand here and brag all night. However, you won't mind a body bragging a little about his country on the Fourth of July. It is a fair and legitimate time to fly the eagle. I will say only one more word of brag--and a hopeful one. It is this. We have a form of government which gives each man a fair chance and no favor. With us no individual is born with a right to look down upon his neighbor and hold him in contempt. Let such of us as are not dukes find our consolation in that. And we may find hope for the future in the fact that as unhappy as is the condition of our political morality to-day, England has risen up out of a far fouler since the days when Charles I. ennobled courtesans and all political place was a matter of bargain and sale. There is hope for us yet.*

*At least the above is the speech which I was going to make, but..."
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You can read all the docs below in less than 1 hour. Misinformation is rampant concerning these basic laws of the US. Read them, you will be really glad you did. In fact these documents are so simple that a group of high school students, would be able to read and interpret them and apply them to real situations, maybe with just a little help by an older person to provide some historical context and explanation of an older version of English, however for the most part the language used is 97% exactly the same as today.

That one dollar becoming over three million does not take into account having to trade from say the Canals Railways Enrons dotcoms housing to the next company taking off. I'd like to know how they came up with the number. Additionally average wage 200 years ago was tiny. Today 100k jobs are common that supposed three million is only 35 times such a salary.

Labor glut grows is the most important long term trend...280 mm incr in India's workforce in 25 years. Add in robotics and people will be working for pennies/hr in a few years. Only the smartest and elite will live comfortable lifes in the future.

I look at the Merril Lynch Logo as it scrolls by on the BofA/Merril Lynch pages in the report and chuckle to myself. For years I had to listen to this same damn indiotic advert. "Merril Lynch is Bullish on America"; and they'd show you a picture of thier damn bronze bull, just in case you didn't know what one looked like. Now the same advertising copy produces a darker and more sinister message; "Merril Lynch is Bullish on America; but they're bankrupt, so maybe you needn't pay them any mind". Ha-Ha, very sardonic. I outlived the bastards.